2021 (4) TMI 828 - HC - Service Tax

Maintainability of summons - Constitutional validity of the levy of Service Tax on transfer of right to use intellectual property rights - HELD THAT - The appellant submitted that in terms of the observation made by the learned Single Bench, the appellant has appeared before the Officer and also submitted his written submission. In such view of the matter, this writ appeal has become infructuous, as the summons issued to the appellant has worked by itself and the appellant has also appeared before the respondent. Appeal closed.

Summary

Issues:
Challenge to summons issued by respondents, maintainability of writ petition, constitutional validity of Service Tax on transfer of right to use intellectual property rights, validity of relevant provisions of Finance Act 1994, presumption of validity of a statute, appearance before the Officer, infructuous nature of the writ appeal.

Analysis:

1. The appellant had challenged the summons issued by the respondents, leading to the current appeal. However, the court noted that a writ petition challenging the summons is not maintainable. The court stated that this alone would be sufficient to dismiss both the writ petition and the appeal. Additionally, the Constitutional validity of the levy of Service Tax on the transfer of right to use intellectual property rights had been upheld by a Division Bench in a previous case. The appellant's argument regarding appeals filed before the Supreme Court against this judgment was considered, but since no stay had been granted, the matter remained unresolved.

2. The appellant had also filed a writ petition before the Principal Bench, seeking a Writ of Declaration to declare the relevant provisions of the Finance Act 1994 as unconstitutional. An interim injunction had been granted in this regard. The court highlighted the presumption of the validity of a statute unless it is declared ultra vires. It was unclear whether a counter affidavit had been filed by the Department in response to the writ petition or if any petition had been filed to vacate the interim order.

3. The appellant's counsel mentioned that the appellant had appeared before the Officer and submitted written submissions, as per the observation made by the learned Single Bench. Consequently, the court found that the writ appeal had become infructuous since the summons had been complied with by the appellant appearing before the respondent. The court, therefore, closed the Writ Appeal, allowing both the appellant and the Department to raise all contentions in the pending writ petition. No costs were awarded, and the connected miscellaneous petition was also closed.